Sensex ends below 18,000; lowest level in almost a year

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Last Updated: Wed, Aug 21, 2013 11:52 hrs

The BSE Sensex fell nearly 2 percent on Wednesday to close at its lowest in almost a year as blue chips slumped on fears of foreign investor selling after the rupee hit new lows ahead of a U.S. Fed report that may give details of its stimulus policy.

Shares failed to hold on to nearly 2 percent gains seen earlier in the day after the Reserve Bank of India eased cash and bond holding rules for banks on Tuesday.

Analysts said the market was losing confidence in the central bank's policies as its steps to ease cash, bond holding rules on Tuesday deviated from its earlier stance of tightening rupee liquidity.

Foreign institutional investors (FIIs) have turned net sellers of shares in August, looking to extend their selling streak for the third consecutive month.

"First, the central bank needs to clarify its policy direction and second, the FIIs have not been aggressive sellers as yet and that will play out once news over QE tapering unfolds," said Sahil Kapoor, assistant vice-president of retail capital markets at Edelweiss Financial Services.

1.86 percent, or 340.13 points, to end at 17,905.91, marking its lowest close since September 11.

The Nifty fell 1.83 percent, or 98.90 points, to end at 5,302.55 after earlier rising as much as 1.9 percent on the RBI's steps to ease cash and bond holding rules.